All Forum Posts by: Joe Ellis

@Andrew Kerr area is not a warzone, just low income.  I'm not real clear on the score so lets say B-.  I have not interviewed PMs yet as this is still in the beginning stages.  Nothing major so far on immediate Capex, but I am still waiting on inspections.

@Dustin Verley Sorry, it is 6% monthly and the 50% placement fee is a one time fee per tenant.  This could be a benefit or a burden depending on turnover i guess.

@Jack P. i agree that it seems too good to be true, which is why I'm reaching out.  I went to craigslist to get my rental estimates and have the realtor getting me some rent comps to be sure.  Property is a foreclosure and is currently vacant, but doesn't need much to get it rent ready, paint and a good cleaning(I was surprised).  Fingers crossed on the upcoming roof and foundation inspections but I saw no interior damage.  Property management costs are true, there are other companies in the area that do 8% with no placement fee, so I have options.

I see your point on the water/gas fees, maybe this is the area where its too good to be true.  I will investigate more but am sure separating the water/sewer will be pricey. Neighborhood is not great but not terrible.

Thank you very much for you insight.

Hello all,

I am currently looking at my first deal and wanted to throw the numbers out there to make sure I'm in the ballpark.   It is a duplex, electric is separate but water and gas are not.

Purchase price: 71,000

Annual Rent:18,600

EXPENSES

Vacancy:1,860(10%)

Maint:1,860(10%)

Managment:1116(6%)

    750(placement fee 50% of rent)

Capex:930(5%)

Insurance:1200(est.)

Taxes:2,883

Garbage:290

Total:10,889

Annual Mort:3,453.60

18,600-14,342.60=4,257.40 cashflow

Seems like it could work, i am thinking i will have to bill the tenants for gas/water/sewer after I get the bill.  I was also kicking around doing electric baseboard in the upper unit to eliminate the need to backcharge the gas use.  Any input or observations would be appreciated.  This is somewhat long distance, so management is necessary.

Keep on keepin on.

Hello all, I am currently looking at a deal that looks like it could be the one to get me started. I wanted to throw the numbers out there to see if you all had any advice or if I was missing something. It’s a duplex, electric is separate but gas and water are shared. Purchase Price: 71,000 Annual rent: 18,600 Annual insurance: 1,200(est.) Taxes: 2,883 Garbage: 290 Vacancy: 1,860(10%) Maintenance: 1,860(10%) Management: 1,116(6%) 775 placement fee (50% one months rent) Capex: 930(5%) Total: 10,914 Annual mortgage: 3,453.60 18,600-14,367.60=4,232.40 cash flow Unfortunately management is a must since it is long distance. I’m thinking I will have to bill the tenants for water/sewer/gas after I get the bills. Also kicking around putting electric heat in the upper unit to eliminate the need to back charge for gas. Any observations/input would be appreciated. How does it look to you?

This is exactly why i posted this.  Thank you for giving me more to consider.

10% CapEx-would still leave about 500/month cashflow. Repairs are TBD. I plan to save my cashflow to build my reserves up (1yr or so) until i know the property better and have a better CapEx outlook.

Thanks keep em coming!

So here is a deal I was just looking at, wanted to see what others thought and see how my numbers compare to others.

5-unit building Separate Electric/Gas/Heat

Price- 439,900

Taxes-5,094

Gross rent-4,175

I figured on 30% down @ 4.5% and no immediate repairs since the building is fully occupied.

Mortgage- 1,557.04

Insurance- 100

Taxes-424.50

Vacancy-334

Maintainence/Repairs-208.75

Prop Management-334(although i will be self managing for now)

Trash/Sewer/Water-300

Monthly cashflow-916.71

Let me know what you all think and since this would be my first deal, anything I may be overlooking or undercompensating could be a life saver.

I just can't take the plunge.  I look at deals every day, it has become a hobby.  But every single deal I look at I seem to find a question mark that makes me shy away. Am I making it harder than it really is?  I have the funds, an understanding of how to underwrite each deal and the desire to get this thing started, but i always feel like the sellers are hiding some giant cost that I have overlooked!  It probably sounds ridiculous, it feels ridiculous.  What kind of self doubts did you all deal with leading up to your first investment properties?  What helped you jump in?  I'm here to learn, drop some knowledge! 

Hello all my name is Joe.  I live in the Philadelphia area and am quickly becoming obsessed with real estate investing.  I do not own any properties yet other than my own and am just looking for advice/connections that can help get started.